Micron’s profits surge as Meta’s AI spending accelerates

Yahoo Finance Executive Editor and host of Sozzi Unleashed discusses the sharp rise in Micron's (MU) operating income and why the chipmaker's improving financial position could put future stock buybacks in focus. Sozzi also digs into Meta's (META) massive capital spending plans

First up, we had chargers should say cuz I'm always spending a lot of time on X. I'm doing a lot of stuff and

a couple things caught my eye.

it's Micron operating income. I remembered. I I have a lot of charts. I got a lot of things going on. This one, first up, Micron is now earning more operating income than Amazon and Meta over the trailing

12 months. Back to what I said on the top of the show, I would have never expected this to happen a decade ago. I mean, Amazon and Meta, Micron more trailing operating income than these iconic companies. But here's the chart and shout out to my man, uh my team over there or the team over there at Coffin making this one happen. Uh this is an amazing chart, but it goes to show you how far Micron has come and how important its memory chips are in this market. So important

that it can pretty much charge whatever the hell it wants. And that's why it's seeing a lot of operating income, and that's why in a few weeks, you're probably going to see a big stock buyback plan from them once the chip acts restrictions live. Fire up the next chart. We're going to keep it going here. Next chart.

Tech dominance over EPS growth. This is another good one. Zero Hedge an old hand on X. I've been following Zero Hedge for many years. This is just and I have a full story on this now on the finance homepage. You can check it out. Uh it's

quite informative because I wrote it. Uh you could check this out. Really Micron and Nvidia are really going to dominate the earnings growth in the S&P 500 this year. and I wouldn't be surprised if you could see if that continues again, if I'm here three months from now and we're talking about it for the fourth quarter, we're talking about it next year.

My Chronon and Nvidia dominating earnings growth and then you have Meta, you have Alphabet, some of the other big players in the space. But I will call out this too. Look how less important the likes of a Chevron, a Boeing, and Exon, those old industrial companies, those old economy companies are how less of important they are to the S&P 500 earnings growth.

Big moment for Micron and Nvidia. And number three chart, Me CapX. Me CapX, very interesting here. and this isn't new per se, but it's always good to zoom out uh on on a company's financial results and I'd be I was actually surprised by this. Uh Meta is now spending or on pace to spend 50% of their revenue on capital expenditures. Of course, Meta amongst a lot of the other hyperscalar company spending billions of dollars on all things AI. and this is where it's showing up. Now, in the best possible case for for Meta, this actually

is around the peak and then it starts to level off and slow down. That is the magic moment for the likes of Meta. Once they're earning more revenue uh and the CAPEX is coming down, that's when the profits really start to flow. That's when the free cash flow story comes back to a Meta and a lot of other hyperscalers. That's when the company can come out there and show faster earnings growth. Interesting chart uh really clearly and I think uh finance Jack, shout out to Finance Jack. I follow him on X. uh Zach is all in on AI and that is very much uh top of mind.